On August 3, 2021 Alector, Inc. (Nasdaq: ALEC), a clinical-stage biotechnology company pioneering immuno-neurology, reported financial results for the second quarter 2021 (Press release, Alector, AUG 3, 2021, View Source [SID1234585611]). As of June 30, 2021, Alector’s cash, cash equivalents and investments totaled $319.6 million.

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"With the recent presentation of encouraging Phase 2 data for our lead program, AL001 in people with FTD-GRN, at the Alzheimer’s Association International Conference and our announcement of a significant collaboration with GlaxoSmithKline to expand and accelerate the development of AL001 and AL101, we move much closer to realizing the vast potential of our progranulin franchise programs," said Arnon Rosenthal, Ph.D., co-founder and chief executive officer of Alector. "Our earlier-stage pipeline is also steadily progressing and based on our immuno-neurology expertise and insights into human genetics, we continue working to advance new programs to the clinic, all with the aim of halting the degeneration associated with serious neurological disease."

Clinical and Corporate Updates

Progranulin Franchise Portfolio

Twelve-month data from up to twelve patients with frontotemporal dementia with a progranulin mutation (FTD-GRN) from the open-label INFRONT-2 Phase 2 clinical trial of AL001 were presented at the 2021 Alzheimer’s Association International Conference (AAIC).
Once monthly treatment with 60mg/kg of AL001 was shown to have a favorable safety profile and resulted in sustained elevation of progranulin to normal levels for greater than one year.
Clinical outcome assessments of AL001-treated patients showed slowing of clinical progression by 47% compared to a matched control cohort of participants from the Genetic FTD Initiative (GENFI2). Additionally, multiple disease-relevant biomarkers of lysosomal function, complement activation and neuronal health trended toward normalization or remained stable, suggesting that treatment with AL001 may slow disease progression. (1)

Alector and GlaxoSmithKline (GSK) entered into a global collaboration to co-develop and co-commercialize AL001 and AL101 for the treatment of neurodegenerative diseases, including FTD-GRN, as well as other forms of frontotemporal dementia, amyotrophic lateral sclerosis (ALS), Alzheimer’s disease and Parkinson’s disease.
The collaboration brings together Alector’s leading immuno-neurology expertise with GSK’s commitment to immunology and human genetics, proven drug development capabilities and global footprint, to help expand and accelerate the development of AL001 and AL101 into large indications.
Under the terms of the agreement, Alector will receive $700 million in upfront payments. Alector will also be eligible for up to $1.5 billion in potential development, regulatory and commercial launch milestone payments, as well as profit-sharing in the U.S. and royalties on any ex-U.S. sales.

Alector is actively enrolling the Phase 3 INFRONT-3 pivotal clinical study of AL001 in at-risk and symptomatic carriers of frontotemporal dementia with a progranulin mutation. An ongoing Phase 2 study in frontotemporal dementia includes a cohort of patients with a C9orf72 mutation, and there are plans to begin testing AL001 in amyotrophic lateral sclerosis (ALS) patients with a C9orf72 mutation in the second half of 2021. AL101, Alector’s second progranulin-elevating monoclonal antibody, is designed to treat people suffering from more prevalent neurodegenerative diseases and is currently in a Phase 1a study in healthy volunteers.
Alzheimer’s Disease Portfolio

Two posters were presented at the 2021 AAIC for Alector’s AL002 program targeting TREM2. TREM2 loss of function is associated with a three-fold increase in the risk of developing Alzheimer’s disease (2). AL002 is Alector’s first-in-class anti-TREM2 monoclonal antibody that is being developed in collaboration with AbbVie in a global Phase 2 study.
The first poster detailed results of the AL002 Phase 1 study in healthy volunteers. AL002 was generally well tolerated and demonstrated dose-dependent and robust target engagement in the brain.
A second poster reviewed the study design of the ongoing Phase 2 INVOKE-2 trial in people with early Alzheimer’s disease. The global, multi-center, double-blind Phase 2 clinical trial is enrolling approximately 265 patients randomized to receive AL002 or placebo. The study is designed to investigate the efficacy and safety of AL002 for the treatment of Alzheimer’s disease.
Data from the Phase 1b study evaluating AL003 in participants with Alzheimer’s disease is expected in the second half of 2021. The AL003 clinical development program is being developed in collaboration with AbbVie.
Second Quarter 2021 Financial Results

Revenue. Collaboration revenue for the quarter ended June 30, 2021, was $6.6 million, compared to $3.2 million for the same period in 2020. Revenue is recognized as the program costs are incurred by measuring actual costs incurred to date compared to the overall total expected costs to satisfy the performance obligation. Changes in estimates for revenue recognized over time are recognized on a cumulative basis.

R&D Expenses. Total research and development expenses for the quarter ended June 30, 2021, were $47.8 million, compared to $34.1 million for the same period in 2020. This change was mainly driven by an increase in expenses to support advancement of several clinical and preclinical programs, as well as in increase in personnel-related expenses

G&A Expenses. Total general and administrative expenses for the quarter ended June 30, 2021, were $14.1 million, compared to $15.7 million for the same period in 2020. This decrease was primarily due to reduced legal fees associated with the conclusion of our arbitration proceedings for certain intellectual property matters.

Net Loss. For the quarter ended June 30, 2021, Alector reported a net loss of $55.1 million, compared to a net loss of $45.3 million for the same period in 2020.

Cash Position. Cash, cash equivalents, and marketable securities were $319.6 million as of June 30, 2021.

Updated Cash guidance. Based on the company’s cash position as of the end of the second quarter, combined with the anticipated net proceeds expected from the GSK collaboration beginning in the third quarter of 2021, Alector anticipates sufficient cash to fund currently planned operations into mid-2024.